Escalon® Medical Corp. Reports First Quarter Fiscal 2016 Results

Nov 16, 2015, 16:30 ET from Escalon Medical Corp.

WAYNE, Pa., Nov. 16, 2015 /PRNewswire/ -- Escalon Medical Corp. (NASDAQ: ESMC) today announced financial results for its fiscal 2016 first quarter ended September 30, 2015.  

Consolidated product revenue increased 5.7% to $2.8 million for the fiscal 2016 first quarter ended September 30, 2015 from $2.6 million in the first quarter of fiscal 2015 primarily as a result of an increase in sales of the Company's Sonomed ultrasound products as well as an increase in the sales of surgical products. 

For the first quarter of fiscal 2016, the Company reported a net loss of $293,000, or $0.04 per share, compared to a net loss from continuing operation of $440,196, or $0.06 per share, in the prior year period.  As part of management's continued focus on reducing costs, in October 2015 it implemented a reduction in force that is expected to represent savings of approximately $770,000 annually.

In the first quarter of fiscal 2016, gross margins were 47.9%, relatively flat with the year ago period.  Marketing, general and administrative expenses were reduced by 8.1% in the quarter as a result of a continued focus on managing hiring, travel, consulting and advertising expenses.  As a percentage of sales, marketing, general and administrative expenses declined to 45.5% from 52.4% in the first quarter of fiscal 2015.  Research and development expenses for the first quarter increased by 11.1% to $360,000 from $324,000 in the year ago period and were associated with the focused introduction of new and enhanced products. 

At September 30, 2015, the Company had $1.3 million of cash and no long-term debt.  Inventory stood at $2.3 million, up from $2.2 million at June 30, 2015.

"Product revenues were up in the quarter, however they did not meet our expectations due to an increase of unfulfilled sales orders resulting from temporary supply chain shortages," commented Chief Executive Officer, Richard J. DePiano, Jr.  "With record shippable open orders at the end of October, anticipated supply chain relief, initial indications for November, as well as the anticipated demand for our new products at the American Academy of Ophthalmology (AAO) Annual Meeting, we expect improved sales for the second quarter.

"We are committed to driving improved financial results as we move through fiscal 2016.  In addition to the cost savings initiatives already implemented, we believe our revenues should begin to benefit from the introduction of new products.  Meetings such as the AAO Annual Meeting are excellent opportunities to educate the market about Sonomed Escalon's ophthalmic solutions, including the new VisionFit wearable adaptive refractor, the SE500 Automated Perimeter, the 2WIN Mobile Binocular Refractometer and Vision Analyzer, as well as the diaton IOP measuring device.  We also are providing a sneak peek of DRACO, a new spectral domain OCT, and the Go VU handheld pachymeter at AAO as well.  We believe these new products will continue to round out our product portfolio and position us to grow market share." 

About Escalon Medical  
Founded in 1987, Escalon Medical Corp. (NASDAQ: ESMC) specializes in the development, marketing and distribution of ophthalmic diagnostic imaging and surgical products branded under the Sonomed Escalon name. Products include a variety of ophthalmic ultrasound, digital imaging and photography, and image management systems as well as surgical products including intraocular gases, fiber optic light guides and sources, and other surgical vitreoretinal instruments. The Company seeks to grow its ophthalmic business by further developing and diversifying its product offering through internal development programs, strategic partnerships, and the acquisition of technology so as to best leverage the Company's distribution capabilities. The Company has headquarters in Wayne, Pennsylvania and research and development, manufacturing and distribution operations in Lake Success, New York, New Berlin, Wisconsin and Stoneham, Massachusetts. For additional information visit www.escalonmed.com and www.sonomedescalon.com.

Forward Looking Statements  
This press release contains statements that are considered forward-looking under the Private Securities Litigation Reform Act of 1995, including statements about the Company's future prospects. These statements are based on the Company's current expectations and are subject to a number of uncertainties and risks, and actual results may differ materially. The uncertainties and risks include whether the Company is able to: develop, obtain regulatory clearance of and launch new products, market new products, implement its growth and marketing strategies; improve upon the operations of the Company including the ability to make acquisitions and the integration of any acquisitions it may undertake, if any, of which there can be no assurance; grow our ophthalmic business; improve sales of products; improve our financial position and improved financial results; grow market share; improve organizational efficiency; enhance the Company's sales organization and distribution channels, implement cost reductions; generate cash; and identify, finance and enter into business relationships and acquisitions, although no acquisitions are currently contemplated.  Other factors include uncertainties and risks related to: new product development, commercialization, manufacturing and market acceptance of new products; marketing acceptance of existing products and new markets; achieving a continued flow of new products for our salesforce and distribution network; achievement of improved margins as older products are discontinued and newer products with enhanced technology are accepted by the market and sold; research and development activities, including failure to demonstrate clinical efficacy; delays by regulatory authorities, scientific and technical advances by the Company or third parties; introduction of competitive products; ability to reduce staffing and other costs and retain benefit of prior reductions; third party reimbursement and physician training, and general economic conditions.  Further information about these and other relevant risks and uncertainties may be found in the Company's report on Form 10-K for year ended June 30, 2015, and its other filings with the Securities and Exchange Commission, all of which are available from the Securities and Exchange Commission as well as other sources.

--financial tables to follow--

                                                           

ESCALON MEDICAL CORP. AND SUBSIDIARY

Unaudited Condensed Consolidated Statements of Operations







Quarter Ended 






September 30, 












2015


2014









Revenues, net





$  2,781,322


$  2,630,320









Costs and expenses:








    Cost of goods sold





1,448,045


1,366,897

    Marketing, general and administrative





1,266,734


1,379,381

    Research and development





359,752


324,277

       Total costs and expenses





3,074,531


3,070,555









Loss from operations





(293,209)


(440,235)

Other income








     Other income





--


--

     Interest income





20


39

         Total other income





20


39

Loss from continuing operations





(293,189)


(440,196)

Loss from discontinued operations





--


(18,763)

Net loss 





$  (293,189)


$   (458,959)

Basic and Diluted Net loss  per share








     Continuing operations





$      (0.04)


$         (0.06)

     Discontinued operations





-


-

      Net loss





$     (0.04)


$      (0.06)

Weighted Average Shares - basic





7,526,430


7,526,430

Weighted average shares –  diluted





7,526,430


7,526,430

 

Selected Balance Sheet Data (Unaudited)





September 30, 2015

June 30, 2015

Cash and Cash Equivalents

$1,327,135

$1,516,761

Inventory

2,318,400

2,219,615

Working Capital

2,681,117

3,006,130

Total Assets

6,000,021

6,549,070

Total Liabilities

3,293,505

3,559,125

Stockholders' Equity

2,706,516

2,989,945

 

SOURCE Escalon Medical Corp.



RELATED LINKS

http://www.escalonmed.com